Anyone looking into the realm of college finance can find quite a bit of information about tuition costs and their rapid rise over the years. What often gets lost in translation is what it means. Do rising costs matter? After all, if aid packages and incomes have also been increasing in line with tuition expenses we wouldn’t have much of a problem.

This helpful report, however, views college costs in the proper context, comparing gross expenses to financial aid and the resulting net expenses to family incomes. From the full report we can see the effect these rising costs have for families, grouped by income quartile. Even the most cursory glance reveals:

Not only are the gross expenses rising, so are the net bills after factoring in financial aid packages. Thus students and their families must bear ever increasing burdens.

Unfortunately, these net costs also continue to rise relative to family incomes. It has gotten to the point where most families cannot simply fund the cost/aid difference by writing checks from excess cash flow. Most people don’t have the capacity to regularly write checks representing a double-digit percentage of their income.

While a large portion of financial aid is allocated by and large according to “need,” the poor bear the greater relative burden of these costs all the same. If few wealthy families can afford to send State U 20% of their annual income how much less so poorer families whose school bills amount to 40% or more of their wages. This largely explains why there is an increasingly high correlation between family income and graduation rates.

So it seems, then, that families can no longer rely on getting enough “standard” financial aid to cover the difference. This is no surprise to the modern college affordologist but a good reminder that quite a dose of creativity is in order as college approaches and commences. Be sure to review past Tips of the Week and stay tuned for more ideas on these pages.